Tea companies brew up new ideas to fight off challenge SBHD: Tea is coming under increasing pressure from soft drinks. Justin Bateman reports on how manufacturers are responding with innovation and pr

A gradual increase in the UK’s temperature has led to a fall in sales of tea and coffee over the last year. While the traditional “cuppa” has always been the most popular drink in the country, soft drinks are more accepted and tea manufacturers are taking measures to reverse this trend. Year on year, the volume of tea consumed is down by almost three per cent. As well as the weather issue, much of this decline can be attributed to the two small but decreasing sectors of the tea market, loose leaf and instant tea. Between them leaf and instant tea account for a mere 12 per cent of all tea, the remaining 88 per cent being bags. With the bag sector on its own worth about 450m a year, competition for share is extremely hard fought. Tetley is the market leader with 23.5 per cent. PG Tips standard and Pyramids brands are next with 18.5 per cent, just pipping own label. One of the few growth areas within the total tea market is the decaffeinated sector, with Typhoo leading the way. The consumer trend towards healthier living is demonstrated by the continuing rise of herbal tea, and to a lesser extent, fruit infusions. Despite being only a 13m market, herbal and fruit teas have grown by an impressive 16 per cent since last year. With standard tea under increasing threat from these alternatives, manufacturers have two options – to promote or to innovate. The market is heavily promoted with three main types of activity. The first is price-related – generally a cut in price on larger packs. Although these tend to be effective, sales of smaller packs are affected adversely. The second is value-added or buy-get offers. All manufacturers use these methods extensively and often in conjunction with icon-led promotions, such as Wallace &amp; Gromit or The Lost World. These have to be chosen carefully, however; Tetley’s Lost World promotion was only modestly successful, rather like the film itself. The third promotion type, self-liquidating promotions, encourage loyalty by giving away one of a set and invite consumers to collect the rest. Tetley has long used this tactic with its Tea Folk range but its effectiveness is beginning to wane. However, where Tetley has been the market leader in every sense is in innovation. As long ago as 1989 Tetley came up with the revolutionary idea of round tea bags. Not only did the bags sit in the cup better but flavour could be circulated more efficiently and produce a better cuppa. Whatever the scientific accuracy of this claim, the fact is that the switch to circular was extremely successful and Tetley’s tea bags have been the clear brand leader ever since. In 1996, Brooke Bond, makers of PG Tips, introduced Pyramid bags. The concept for this centres on the amount of space afforded within the tea bag – with more room to move, the flavour of the tea produced is more like tea from a pot and therefore preferable. Regional trials were followed by a national launch. While stocks of Pyramids have been moving, sales have not been incremental to PG Tips overall. Their introduction was expected to precipitate a recovery but this has not materialised and the decline of standard PG Tips bags and PG’s loose leaf product continues. The most recent and ingenious idea has once again come courtesy of Tetley. Satisfied that the taste of its tea and the shape of its bags was to the consumer’s liking, the practicalities of making a cup of tea were then addressed. In the autumn of 1997, the Tetley Drawstring tea bag was launched; allegedly it enables the tea-maker to extract the last drops of flavour from the bag, remove it from the cup and take it to the bin without unpleasant scalds or even drips. Advertising support and product awareness have been typically strong and although current sales total 300,000 with distribution and sales growing each month, it is too early to tell whether it will rival the round variety. As well as mechanical innnovations, the desire to cash in on a growth market such as herbal and fruit teas is a natural one and Tetley has launched its own fruit infusion range. Of the new fruit brands it has been the most successful but in reality made very little impact on the major brands. As the fruit sector has declined over the past year, it may be advised to introduce some herbal elements to its recipes if it is to succeed in this area. With instant teas, decaffeinated teas, one-cup teas, speciality teas, herbal teas, fruit infusions, round bags, pyramid bags and now tea bags with elaborate pulley systems all available, it is hard to know from where the next innovation will come. No doubt ideas are brewing.

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